Appeal considered in retirement system case

Appeal considered in retirement system case

Judge rules state already funds employer’s contribution to LSERS

A judge’s recent dismissal of a lawsuit that 47 school boards from across Louisiana filed against a state retirement system in 2005 is being reviewed to determine “what steps to take next,” the head of the Louisiana School Boards Association said Friday.

The suit arose from a dispute over whether it was the obligation of the state or individual school boards to pay for the employer’s share of contributions to the Louisiana School Employees Retirement System.

The Lafayette School Board is not one of the 47 plaintiffs.

The school boards contend they should not be required to pay their employer’s contributions to the retirement system from funds available to them through the Minimum Foundation Program. The MFP is the annual source of basic aid for public schools and helps fund school operations, teacher salaries and other expenses.

The school boards instead claim the Legislature should make a separate appropriation directly to the retirement system.

State District Judge Kay Bates, of Baton Rouge, noted in a ruling in the case in 2011 that “the amount of MFP funding received by each of the plaintiff school boards has increased every year and the MFP funding has exceeded the full amount of each school board’s obligation for the employer’s contributions to the LSERS retirement system.”

In a final ruling issued April 9, Bates said “it is an undisputed fact that the entire employer’s contribution is fully funded by the Legislature through the MFP.”

“Contrary to the plaintiffs’ contentions that the Legislature has failed to appropriate sufficient funds to pay the employer’s contribution and that these costs must be collected by LSERS directly from the state, LSERS has shown that the Legislature has funded not only the normal costs but also the full employer’s contribution,” the judge stated.

Scott Richard, executive director of the Louisiana School Boards Association, said it is important that the court acknowledged it was the state’s constitutional responsibility to provide for the employer’s portion of retirement contributions.

“However, at issue is the court concluding that the MFP — the state’s minimum foundation school funding program designed to fund public education for students in Louisiana — actually captures that specific dollar amount for each school board,” Richard said. “This only adds to the growing list of unfunded mandates that school boards are grappling with in today’s tough economic climate.

“LSBA will be working closely with legal counsel and the participating school systems as we prepare to move to the next level of litigation regarding this matter,” he added.

A $3.5 billion MFP proposal for the 2013-14 school year was approved March 8 by the state Board of Elementary and Secondary Education. The plan will be reviewed by the Legislature during its 2013 session that began April 8.